I use this blog to gather information and thoughts about invention and innovation, the subjects I've been teaching at Stanford University Continuing Studies Program since 2005.
The current course is Principles of Invention and Innovation (Summer '17).
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Friday, May 04, 2012

(BN) Apparel-Swapping Millennials Eschew Stores and Malls

Bloomberg News, sent from my iPhone.

Apparel-Swapping Millennials Eschew Stores and Malls

May 3 (Bloomberg) -- Retailers from Gap Inc. to Urban Outfitters Inc. are already struggling to persuade consumers to pay full-price for clothes. Now, it turns out, many of their younger customers prefer trading T-shirts, jeans and designer dresses among themselves than actually buying new gear.

Clothing swaps are a hot ticket for Americans aged 18 to 34. Millennials attend swap house parties from New York to San Francisco. And they gather online, frequenting such sites as Swapstyle.com, which has swelled to more than 55,000 members since its 2002 founding.

Frugality has become a way of life for a cohort weighed down by student-loan debt and high joblessness, according to WSL Strategic Retail. In a WSL survey, 80 percent of respondents aged 18 to 34 said it was key to get the lowest price on most things they buy, up from 69 percent two years earlier and the only change among the three age groups surveyed.

"They can stay engaged in fashion without getting themselves in more debt," Wendy Liebmann, chief executive officer of New York-based WSL, said in a telephone interview. "This generation has also grown up in an online world of Craigslist and EBay where selling something or swapping something has become somewhat second nature."

The surge in apparel bartering comes as retailers struggle to woo young customers. While consumer spending rose in March, gasoline prices have held at more than $3.80 per gallon for more than a month and the unemployment rate remains above 8 percent. That's cutting discretionary spending for the newest members of the workforce.

"People are saying, 'I can at least figure out another way to look like I'm wearing something new and fresh without spending top dollar on it, or waiting for it to go on sale and not being able to find my size,'" said Alison Paul, who leads the retail group at Deloitte LLP in Chicago.

Sarah Smith, a 24-year-old literary assistant in Manhattan, went to a coworker's apartment in February for her first clothing swap, armed with three dresses and two skirts she hadn't worn in at least a year. She walked out with a pair of skinny American Eagle army pants, a Simply Vera silk blouse and gray American Apparel T-shirt, pleased with the exchange.

Multiple Parties

Emily Weidner, a 29-year-old who works for the U.S. Forest Service in Washington, has hosted multiple clothing swap parties. She "consciously" tries to limit the amount of money she spends on apparel.

"I've been trying to aggressively pay off student loans from undergrad and grad school," said Weidner. "I've heard a lot more about people being interested in participating in clothing swaps and I've been invited to a number of them."

Frugal shoppers also are downloading Poshmark, an iPhone app introduced in December that hosts real-time shopping events for members to buy and sell clothes from their closets. Poshmark lets users follow others with similar taste, such as "animal prints" or "Marc Jacobs."

The social aspect of shopping made possible by apparel- swapping parties is exactly what retailers need to do more of if they are to attract technologically driven millennials, according to WSL's Liebmann.

Real Opportunity

"The opportunity to create a party around sharing and seeing new and trading old is a real opportunity to get younger shoppers back into the stores," she said.

Gap and Urban Outfitters, both seeking to cut back on discounts for merchandise, have increased social-media marketing efforts to target young consumers.

Gap, which has said it's not comfortable with its market share among 25- to 30-year-olds, worked with fashion bloggers to promote its spring collection this year. Urban Outfitters has promoted "social free shipping," which gives customers free shipping if they tell friends the option exists.

In a March survey from Deloitte LLP, 52 percent of consumers under 45 years old said they rely more on Web comments and recommendations from others when deciding what to buy instead of marketing messages from retailers. That compares with 37 percent for customers 45 and up.

At the same time, only 22 percent of all respondents said retailers were offering more value for their money this spring than a year ago, compared with 45 percent in 2010.

Hannah Cole-Chu, a 25-year-old in Washington who's in between jobs, has been attending clothing swaps and once came away with an oft-used Coach Inc. purse that she "loves." Cole- Chu doesn't frequent the mall, where it's frustratingly common to see "a little tank top for $40."

Clothing swaps offer "a more personal experience than going into a store," she said. "It's a nice relaxed social atmosphere. It's not as high-pressure as shopping is sometimes."